WASHINGTON -LRB- CNN -RRB- -- Former Republican Sen. Ted Stevens of Alaska has been `` cleared '' by the Justice Department 's request to dismiss his federal corruption convictions and drop all charges against him , his lawyer said Wednesday .

Former Sen. Ted Stevens , 85 , of Alaska lost his re-election bid in November .

Prosecutors accused Stevens of failing to disclose hundreds of thousands of dollars of `` freebies '' from an oilfield services company on Senate ethics forms . But in December , an unnamed FBI whistle-blower accused prosecutors of withholding evidence from the defense , and the Justice Department asked a judge to dismiss the charges against Stevens on Wednesday .

`` His name is cleared , '' Stevens ' lawyer , Brendan Sullivan , told reporters . `` He is innocent of the charges , as if they 'd never been brought . ''

Stevens , 85 , lost his bid for a seventh full term in November after his conviction on seven counts of lying on Senate ethics forms . Sullivan said the Justice Department was forced to request the dismissal because of `` extraordinary evidence of government corruption . '' Watch more on the dismissal of the case ''

`` Not only did the government fail to provide evidence to the defense that the law requires them to provide , but they created false testimony that they gave us and actually presented false testimony in the courtroom , '' he said .

And one of Stevens ' longtime friends , Utah Sen. Orrin Hatch , said Wednesday that Stevens was `` screwed by our own Justice Department . ''

In a statement issued Wednesday morning , Stevens thanked the Justice Department and Attorney General Eric Holder for requesting that the charges be dropped .

`` I always knew that there would be a day when the cloud that surrounded me would be removed , '' Stevens said . `` That day has finally come . ''

U.S. District Judge Emmet Sullivan has set a Tuesday hearing on the Justice Department 's request to dismiss the case .

Sullivan , who is not related to Stevens ' lawyer , excoriated prosecutors during the trial and held the prosecution in contempt at one point . In December , two months after the guilty verdicts , the FBI whistle-blower accused prosecutors of withholding evidence from the defense and reported that someone with the government had had an inappropriate relationship with Bill Allen , an oil industry executive who was the government 's key witness .

In the motion it filed Wednesday , the Justice Department acknowledged that Stevens was not given access to notes taken by prosecutors during an April 2008 interview with Allen , the former chairman of an oilfield services company at the center of a corruption probe in Alaska . The notes show that responses by Allen , the prosecution 's star witness , were inconsistent with testimony he gave against Stevens , and that information from the interview could have benefited Stevens at trial , the motion says .

`` In light of this conclusion , and in consideration of the totality of the circumstances of this particular case , I have determined that it is in the interest of justice to dismiss the indictment and not proceed with a new trial , '' Holder said in a written statement .

Hatch , a senior Republican on the Senate Judiciary Committee , said he called Stevens in Alaska on Wednesday and the former senator sounded `` elated , as anyone would . ''

`` Here 's a guy who gave better than 60 years ' service to the country and was screwed -- screwed by our own Justice Department , '' Hatch said . But he praised Holder for `` standing up and fixing this foul situation . ''

`` I think he 's more than shown integrity and decency in this matter , and it 's not an easy thing for him to do that , '' Hatch said . `` He has , in looking at it , realized now what people like myself have been saying is 100 percent right . ''

Senate Majority Leader Harry Reid , D-Nevada , also commented on the Justice Department 's request , saying , `` Ted Stevens is 85 years old . He 's already been punished enough . I 'm satisfied . ''

And in a statement Wednesday , Alaska Gov. Sarah Palin said that Stevens `` deserves to be very happy today . What a horrible thing he has endured . The blatant attempts by adversaries to destroy one 's reputation , career and finances are an abuse of our well-guarded process and violate our God-given rights afforded in the Constitution .

`` It is a frightening thing to contemplate what we may be witnessing here -- the undermining of the political process through unscrupulous ploys and professional misconduct . Senator Stevens ... never gave up hope . It is unfortunate that , as a result of the questionable proceedings which led to Senator Stevens ' conviction days before the election , Alaskans lost an esteemed statesman on Capitol Hill . His presence is missed . ''

The Justice Department 's Office of Professional Responsibility will review the prosecution team 's conduct in Stevens ' case , Holder said . Asked whether the prosecutors should be charged themselves , Sullivan told reporters , `` That is not my job . I 'm a defense lawyer . ''

During the trial , Assistant Attorney General Matthew Friedrich said Stevens hid `` hundreds of thousands of dollars of freebies '' he received from Allen 's company , VECO , and from Allen himself . Many of the allegedly free services were given as part of the renovation of Stevens ' Alaska home , prosecutors said .

CNN 's Terry Frieden , Paul Courson , Ted Barrett and Deb Krajnak contributed to this report .

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NEW : Senate majority leader , Alaska governor back Justice Department action

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Utah Sen. Orrin Hatch says Stevens was mistreated , praises attorney general

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Defense attorney cites `` extraordinary misconduct of government prosecutors ''

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Ted Stevens : `` I always knew that there would be a day '' when justice would come